Marc Faber Interview with ABC Australia - April 9, 2012

Marc Faber Interview with ABC Australia - April 9, 2012:

MARC FABER: Well I mean right now the US stock market is outperforming other markets. But I think that in the US the fiscal deficit is a huge problem to which there are hardly any solutions, for the simple reason that the Democrats want to spend and the Republicans also want to spend. And nobody really wants to increase taxation. And so the deficit will in my opinion continue to increase and will necessitate money printing, but it may not lift economic activity. The second source of uncertainty is really what will happen in China. They have different views. Most economists will say well we'll have a soft landing and so forth. But I've been working in the investment business for 40 years. All the time I've heard about soft landing and no recessions and no crashes and no panics and so forth and so on. So who knows, maybe the Chinese economy will de-accelerate more rapidly than is generally expected and possibly even crash, in which case it would have a huge impact on economic activity around the world.

A China slow-down will cause the Australian economy to suffer badly

MARC FABER : Correct. If there is a meaningful slow-down in China then obviously the Australian economy will suffer very badly. I happen to think that the Australian economy will suffer regardless because we have a very elevated property market that has become unaffordable for a large number of people and we have already some cracks in the property market. We have a very high household debt to GDP ratio. So I'm not optimistic about the Australian economy.- in abc.net.au

A major Sovereign Crisis unfolding

MARC FABER : We will have another phase of the crisis, the question is from what level of asset prices and obviously also when will it happen. And I think the next time we will have a major sovereign crisis. - in abc.net.au

Marc Faber : Wealth is doomed to be destroyed by war and inflation

Marc Faber : “People of privilege tend to prefer to risk their own destruction than surrender their advantages.”

The Fiscal Deficit in The US is a huge problem

MARC FABER: Well I mean right now the US stock market is outperforming other markets. But I think that in the US the fiscal deficit is a huge problem to which there are hardly any solutions, for the simple reason that the Democrats want to spend and the Republicans also want to spend. And nobody really wants to increase taxation. And so the deficit will in my opinion continue to increase and will necessitate money printing, but it may not lift economic activity. The second source of uncertainty is really what will happen in China. They have different views. Most economists will say well we'll have a soft landing and so forth. But I've been working in the investment business for 40 years. All the time I've heard about soft landing and no recessions and no crashes and no panics and so forth and so on. So who knows, maybe the Chinese economy will de-accelerate more rapidly than is generally expected and possibly even crash, in which case it would have a huge impact on economic activity around the world. - in abc.net.au

Marc Faber Not optimistic about the Australian economy

MARC FABER : Correct. If there is a meaningful slow-down in China then obviously the Australian economy will suffer very badly. I happen to think that the Australian economy will suffer regardless because we have a very elevated property market that has become unaffordable for a large number of people and we have already some cracks in the property market. We have a very high household debt to GDP ratio. So I'm not optimistic about the Australian economy.- in abc.net.au

The FED creates one distortion in the market to the next distortion to the next bubble

MARC FABER : If I increase the quantity of money there will be symptoms of inflation. The Central Bank does not know where these symptoms will occur so it creates one distortion in the market to the next distortion to the next bubble. And so you have booms and busts and much higher economic and financial volatility. - in abc.net.au

Marc Faber warns of 20 percent fall in Equities

Marc Faber : "The question is not whether this is a correction, the correction has got underway. We may easily have a correction of 10% to 20% here."

Marc Faber : There is no Deflation in the system today except in the housing market

Marc Faber : Well, I mean, you know, I’ve learned that what I know I obviously learned from someone. I didn’t invent it. So I worked at White Weld with Gary Schilling and he’s a friend of mine; I see him occasionally at the conferences and so forth. And I disagree with him about that we have deflation. He lives in New Jersey. I went to New York airport the other and day and then I drove to New York City and the Lincoln Tunnel fee has just increased from $8 to $14. Well, I’m sorry, that is a 50 percent increase. And so there is no deflation in the system today. But if you say there is deflation in the housing market, yeah, there has been deflation in the housing market and if you ask me will there be one day a deflationary collapse, yes, one day there will be a deflationary collapse, but you understand, as an investor it’s nice to say there will be a deflationary collapse, but it could happen from Dow Jones 100,000 or gold price 20,000 or from home prices that are much higher than today and from a dollar that has depreciated much more than is the case today. So the difficulty for the investor is actually to navigate between today and the time of collapse that I think is inevitable. But how do you protect your wealth in the meantime and in the time of collapse? Investors, and I think they have to begin to think about this already today and say, okay, what does it mean if there is a global kind of deflationary collapse. In a deflationary collapse, everything essentially goes down in value, but obviously, like in an inflationary boom, in an inflationary boom you have different assets that go up at different times with different intensity. So let’s say if you look at 2000 to today, you were better off in gold and commodities than in equities. Now, in a deflationary collapse, the key is to say, okay, I’m only going to lose 50 percent when everybody else will lose 90 percent. So relatively speaking, I will be much better off. And that is the strategy that investors should consider: How to position themselves to lose less in the deflationary collapse in the final crisis than the majority of people. Then relatively to other people, their position will improve.- 06 Apr 2012
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Marc Faber : Gold would not help you a lot in the case of civil unrest

Marc Faber : .... I’m not sure that gold would help you a lot in the case of civil unrest. But the point is this. If someone that you meet who is well-to-do and says gold doesn't pay any interest, tell him at the present time your deposits are not paying you any interest either. And in real terms, inflation adjusted, you are penalized. You are losing out by say 5 percent per annum because your cost of living increase are going up by say 5 percent and the interest is zero. So in this environment, you have actually an advantage to own a sound currency like gold vis-à-vis paper currencies where the quantity can be increased. And by the way, you ask your well-to-do people once, when did you travel overseas the last time? Haven’t you noticed how expensive Australia and Canada have become relative to the United States or Switzerland? And if they say, yes, Canada is now very expensive. And you say yes, that is a symptom of US monetary inflation that depresses the value of the purchasing power of the dollar.- in The Financial Sense NewsHour - 06 Apr 2012
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Marc Faber : Warren Buffett was right about Gold

Marc Faber : Well, you see, I’m an advocate of investments that generate free cash flow. In other words, you invest in something and every year you get, after all expenditures, some money in the form of interest payments or in the form of dividends. And that allows you a lot of flexibility because if you have all your money in physical gold or in exploration companies the problem is you have no cash flow. So if let’s say your portfolio drops by 50 percent, you don’t have any money to add to your positions, whereas if you have cash flow, every year some money comes in and you have purchasing power to buy the assets that during that year fell the most or where you think some value is emerging. And I think it is very important to have always cash flow to invest in opportunities. And so I also advocate essentially a diversification. You know, a few weeks ago Mr. Buffett came out and said that gold is unattractive and so forth and several studies will show that stocks over the long run have performed better than gold. I fully agree with this study. It should be clear that the company that generates and pays out dividends over time will perform better than a dead asset like gold. However — and this is a big “However” — I once talked to Jeremy Siegel, he’s written many books about the performance of stocks, in 1800 and so forth. I [said], Jeremy, you start your book on the performance at 1800, are you actually aware that by 1841, the poor man’s recession, most of the canal companies and most of the banks were bankrupt. So if you invested your money in 1800, by 1841 most of it was gone. And this is the point, in equities you have to rebalance your portfolio and in gold you don’t have to do that. It’s a totally different type of asset. You can’t compare it. And the other day, you know, Kodak went bankrupt. I remember in ’72 and ’73 among the 10 most popular stocks among institutions you had Polaroid and Eastman Kodak and both went bust over time and they were disastrous investments. So it’s nice to say the market is going up in the long run by this and that, that I agree, but you have to rebalance the portfolio. And in gold you don’t have to do that. Gold is basically cash that doesn't pay any interest. - in The Financial Sense NewsHour - 06 Apr 2012
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Marc Faber interview - The Financial Survival Network - 13.Apr.2012

Marc Faber interview by The Financial Survival Network - 13.Apr.2012 , ".....the west is in decline says Dr. Mark Faber : not specifically the US but the entire western world is in relative decline compared to nations that have young populations growing populations and plenty of energy and drive , in the west we are an aging society that has become accustomed to wealth , we have grown in the last 30 years principally because of a rapid expansion of credit consumer debt mortgage debt and that has allowed people to live way beyond their expectations and beyond their means so there will be a payback time ..." says Marc Faber

Marc Faber FOX Business Network exclusive Interview - 13 Apr 2012

Marc Faber : We are in a Worse Position Than in 2008 and in 2009 : Investment analyst and entrepreneur Marc Faber spoke with FOX Business Network’s (FBN) Liz Claman about the health of the global economy saying 'over the last few months, the market has acted very badly', and predicted this is indicative of 'the beginning of a downward trend'. we can easily see a 10 to 15 percent correction in the markets says Dr Doom Marc Faber

On the health of the global economy
'Over the last few months, the market has acted very badly. There are less new hires, the volume has dried out, insider sales have picked up, and this is the beginning of a downward trend. We may easily have a correction of 10-20% here. Most stocks are already down 10% from their highs. Markets have more than doubled from the lows in 2009. The global economy has actually deteriorated. 'It has optically improved because of huge government spending but in principle we are in a worse position today than we were in 2008 and 2009. There will be more money printing and if your are hyper bearish, maybe you are better off in equities than you are in government bonds and cash. I also advocate to own some gold'. - Source: Fox Business Network

Marc Faber : If I were the Fed chairman I would resign

Marc Faber : Well, I mean I think personally that over the last twenty years the financial sector has not criticized the federal reserve sufficiently. They should have attacked the federal reserve for printing money left, right, and center. But, the financial service industry benefits from writing asset prices. So when you have a crisis whether it's the S&L crisis or the tequila crisis of ’94 or LPCM or the NASDAQ going down they cheered that the Fed continued to print money because it lifted asset prices. And, so their salaries went up and their performances went up and so forth and so on. So what I would do if I were the Fed chairman having been completely wrong about really everything, which is a truth series about the depression and the current conditions, for sure I would resign. But if I were, say, a pension fund I would tell the contributors and the recipients either you pay more or you receive less but we have to balance the books because the returns aren’t going to be the ones that we are used to between 1982 when the Dow Jones bottomed out below eight hundred and subsequently rose to over fourteen thousand. It's not going to happen again in real terms. Maybe if they print money but if they print money, as I said, the purchasing power of the, say, average American household would diminish because the cost of living will increase that much more. - in a recent interview with Chris Martenson

Marc Faber : Real Estate in America are the Best Investment asset right now

Marc Faber : "The Most Important Thing in Investments is to Hear What is Not Discussed!" is so striking. "I think investors should start to think what investments will go down the least when there is massive wealth destruction,"
"I happen to believe that home prices in the south of the U.S., in Arizona, Georgia, Nevada and so fourth, are relatively inexpensive compared to other asset prices." - in Yahoo Finance
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Marc Faber : all Assets are mispriced in a zero rates environment

Marc Faber : "You have to ask yourself what asset prices will be relatively secure. I happen to think real estate, because of its wide ownership"
''everything is mispriced because when you have zero rates, you have complete mispricing of all assets." - in Yahoo Finance
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Marc Faber : Forget Treasuries, Housing Is the Place to Hide

Marc Faber: Forget Treasuries, Housing Is the Place to Hide

Marc Faber : “The Most Important Thing in Investments is to Hear What is Not Discussed!” is so striking.
“I think investors should start to think what investments will go down the least when there is massive wealth destruction,”
“I happen to believe that home prices in the south of the U.S., in Arizona, Georgia, Nevada and so fourth, are relatively inexpensive compared to other asset prices.” Marc Faber told Yahoo Finance via skype from his office in Thailand.

Marc Faber : The U.S. Economy remains Anemic

Marc Faber : “The technical underpinnings of the market have been a disaster in the last couple of weeks,” “The number of new highs have declined, the volume has been poor, insider sales just hit a record.” ... “I still feel we are in a correction period and again like in equities, it’s a correction that is somewhat more serious." Dr. Marc Faber said on the sidelines of the Maybank Invest Asia conference. - in CNBC

Marc Faber : Well-to-do people may lose up to 50% of their total wealth

Marc Faber : well, I mean, I would say that well-to-do people may lose up to 50% of their total wealth, they'll still be well to do. instead of a billion, they'll have say 500 million. but I think there is a massive wealth destruction coming down the line. I'm not saying it's coming tomorrow but I think looking at the bailout and the money printing, they basically have postponed the problems and actually made them larger in the sense that the government debt has increased dramatically and somewhere a solution will have to be found for this government debt - in CNBC

Marc Faber : The money printing will not create long-lasting wealth

Marc Faber : well, basically I think that whole bailout and the money printing will not create long-lasting wealth, nor will it create healthy economic growth. and if i look at the world, then i see essentially well to do people that have done unbelievably well and i see the middle class and working class that hasn't done well. and i think somewhere down the line we will have a massive wealth destruction. that usually happens either through very high inflation or through social unrest or through war or credit market collapse. maybe all of it will happen but at different times - in CNBC

Marc Faber : The unfunded liabilities increase rates substantially

Marc Faber : Yeah, plus the pension fund industry. They have to have some returns. When interest rates are at zero on cash deposits and on, say, long-term government funds on the ten year notes, say, two percent of thirty years, three percent, they cannot meet the liabilities so the unfunded liabilities increase rates substantially. - in Chris Martenson Interview

Marc Faber : In a money-printing environment I am reluctant to short

Marc Faber : "In a money-printing environment I'm reluctant to short. But say whereas I recommended investors to increase their positions last October, November, December, now I think that if people are overweight in equities they should reduce positions somewhat…maybe cash. The U.S. dollar is desirable at the present time. And we have to say one thing. The market consists of thousands of stocks and the market consists of many different stock markets globally. The S&P has done exceptionally well relative to, say, emerging economy stock markets, most of which are still lower than they were in 2011. So, if you look at the advance-decline line of all the share markets in the world, then it is definitely being deteriorating. And I happen to believe that money printing will continue and I would probably buy financial shares and I believe that the Japanese market may outperform all the other markets against all expectations in 2012." - in BloombergTV

Marc Faber On bad returns for Gold in Q1

Marc Faber : "Yes, that's correct. But the returns have been very good since 1999 and year over year I think gold is still up 12%…I think that gold is in a correction period and we had an intermediate peak on September 6, 2011. And I always advise don't put all your money into gold because it doesn't have any cash flow. So you are really dependent on the price appreciation. That is different from owning, say, equities that have a dividend yield of 5%, which I can find in Asia." - in BloombergTV

Marc Faber : More QE to come - The Financial Sense NewsHour - 05 Apr 2012

Marc Faber interviewed by Jim Puplava of The Financial Sense NewsHour - 05 Apr 2012 : More QE to come , we will likely see inflation before having deflation , shorting the markets might be risky , the central banks worldwide will keep on printing money , smart investors should stay diversified in this kind of environement , Marc Faber recommends dividend-paying stocks, gold, emerging market stocks and real estate.

Marc Faber not recommending to Buy more Gold at this point

Marc Faber : "As you know, I have been very positive about gold and I still accumulate gold every month. But I think that we had an intermediate peak at $1921 on September 6 of last year. Then we dropped sharply to $1,522 an ounce on December 29, 2011. Since then we've had a feeble recovery. I think that the correction period is not yet over. I'm not selling my gold because I don't trust governments and I don't trust the Federal Reserve, nor would I trust the ECB or other money traders in the world. They are all going to print money. I still recommend to hold gold." - in CNBC 02 Apr 2012
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Marc Faber : QE3 has to be Enormous

Marc Faber : "It would have to be very significant to boost all asset prices including homes, stocks, bonds and commodities…Much larger [than QE1 and QE2]." - in CNBC 02 Apr 2012
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Marc Faber on Why Investors should have caution

Marc Faber : "Basically I think that earnings may begin to disappoint. That corporate profit margins could deteriorate. And I think we still have a lot of issues. Don't forget we have QE1, QE2 and Operation Twist. I think in order to really hold asset prices across the board much more QE3 would have to be gigantic. I'm not ruling out that stocks can continue to go up but I doubt they will go up at the same rate as the first quarter. And if you look at the technical under underpinnings of the market, they have deteriorated. The list of new highs is deteriorating. The short positions are way down. And we have an overbought condition in the market if we measure the number of stocks above the 50-day and 200-day moving average. So, generally I would say maybe April is traditionally still a month of seasonable strength but somewhere in the next six months I think you can buy the whole market much cheaper." - in CNBC 02 Apr 2012
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Marc Faber on The Alex Jones Show - 04 Apr 2012

Marc Faber on The Alex Jones Show - 04 Apr 2012 - Alex Jones talks with Swiss investor Marc Faber about the rapidly crumbling global economy. Faber writes the monthly investment newsletter The Gloom Boom & Doom Report and is the author of Tomorrow's Gold: Asia's Age of Discovery. He also writes for Forbes, Die Welt, the Wall Street Journal and other publications

Faber : The market is no longer oversold the way it was in December

Marc Faber : "I think that if you look back at a year ago we made a peak of 1370 on S&P on May 4 and then dropped sharply to 1074 on October 4. Then we recaptured the lows in November and December. Since then, the first quarter has been very powerful and has surprised investors because of its strong performance. And I think now the expectations are very high. The market is no longer oversold the way it was in December. And everybody thinks that the race is on, go along with equities, the hedge funds have positioned themselves on the long side and optimism is high. I would be very careful at this stage." - in CNBC 02 Apr 2012
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Marc Faber on the FOMC release & Ben Bernanke - 03 Apr 2012

Dr Marc Faber interviewed by Capitalaccount of Rt America - 03 April 2012 about the FOMC release and Ben Bernanke's zero interest rates policy which is forcing people to speculate " We have known now after the experiment with socialism and communism and the planned economy that the complete disaster government interventions into the market place have been but this is precisely what the federal reserve and the treasury are trying to do and for sure it will fail over time " Marc Faber said

Marc Faber interview - Bloomberg 02 Apr 2012

Marc Faber on Stocks, Gold, Fed Policy, Strategy . Marc Faber, publisher of the Gloom, Boom & Doom report, talks about the outlook for stocks and investment strategy. Faber, speaking with Betty Liu on Bloomberg Television's "In the Loop," also discusses Federal Reserve policy and the gold market. (Source: Bloomberg) "In a money-printing environment I'm reluctant to short. But say whereas I recommended investors to increase their positions last October, November, December, now I think that if people are overweight in equities they should reduce positions somewhat...maybe cash. The U.S. dollar is desirable at the present time." Marc Faber told Bloomberg TV

Faber : Earnings will deteriorate and Profit margins will shrink

Marc Faber : "First, I think there are some cost pressures creeping in terms of rising raw material costs, especially energy, and the problem with, say, a QE3 would be that you are doing it in an environment of very elevated oil prices. So, maybe the energy prices would go up more and squeeze the margins of some corporations. And certainly squeeze the consumer. And my sense is that the economy has bottomed out but is far from robust because the typical household is being squeezed by higher cost of living increases. There are various measurements. You can measure the CPI. It is rising by less than 3%. Everywhere I look I see households essentially paying between 5% to 10% more for goods and services than a year ago." - in CNBC 02 Apr 2012
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Faber : The Japanese market may outperform all the other markets against all expectations in 2012

Marc Faber : "In a money-printing environment I'm reluctant to short. But say whereas I recommended investors to increase their positions last October, November, December, now I think that if people are overweight in equities they should reduce positions somewhat…maybe cash. The U.S. dollar is desirable at the present time. And we have to say one thing. The market consists of thousands of stocks and the market consists of many different stock markets globally. The S&P has done exceptionally well relative to, say, emerging economy stock markets, most of which are still lower than they were in 2011. So, if you look at the advance-decline line of all the share markets in the world, then it is definitely being deteriorating. And I happen to believe that money printing will continue and I would probably buy financial shares and I believe that the Japanese market may outperform all the other markets against all expectations in 2012." - in CNBC 02 Apr 2012
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Marc Faber predicts Massive Wealth Destruction to Hit Investors

Dr. Marc Faber , The author of the Gloom Boom & Doom Report warns that the world will face "massive wealth destruction" caused by either inflation or social unrest. "Well to-do people will lose up to 50% of their total wealth," he adds. Investors, particularly those in the "well-to-do" category, could lose about half their total wealth in the next few years as the consequences pile up from global government debt problems,

Marc Faber : America haven't got the Money to Finance a War

Marc Faber : "Say war breaks out in the Middle East or anywhere else, Bernanke will just print even more money -- they have no option...they haven't got the money to finance a war,"
"You have to be in precious metals and equities... most wars and most social unrest haven't destroyed corporations - they usually survive," Dr Marc Faber told Reuters on the sidelines of the Middle East Investment Conference 26 March 2012

Marc Faber @ CFA Institute Middle East Investment Conference 26 March 2012

Marc Faber, editor of “The Gloom, Boom and Doom Report,” kicked off the CFA Institute Middle East Investment Conference by quoting Ernest Hemingway who said, “The first panacea for a mismanaged nation is inflation of the currency; the second is war. Both bring a temporary prosperity; both bring permanent ruin.” On this downcast note, Faber attacked short-term Keynesian spending and reviewed the implications for investors of the accelerating shift of world economic and political power from the developed countries to the developing world. - source :  http://meic.cfainstitute.org/2012/03/26/marc-faber-continuing-financial-crisis-must-be-endured

Marc Faber : Real Estate Market has not been effected positively from money printing

Marc Faber : I don’t think we are on a permanent plateau of printing but understand. If you start to print it has the biggest impact, then you print more, it has a lesser impact unless you increase the rate of money printing very significantly. And, the third money printing has even less impact and the problem is like the Fed, they printed money because they wanted to lift the housing market but the housing market is the only asset that didn’t go up substantially. We have bottomed out in many markets. I can see that but across the board real estate has not been effected positively from money printing. But what hasn’t been affected positively from money printing is the price of silver, is the price of gold, and of equities that have more than doubled from the lows in 2009. - in Chris Martenson interview
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Marc Faber : China has now got its own domestic credit bubble

Marc Faber : China has now got its own domestic credit bubble. Faber sees parallel scenarios being played out in India, Southeast Asia and Latin America. The growing economic power of these nations will inevitably lead to further geopolitical tensions where the MENA region is a potential powder keg. - in seekingalpha

Marc Faber : If you cannot live with Volatility, stay in bed

Marc Faber : "Political risk was high six months ago and is higher now. I think sooner or later, the US or Israel will strike Iran - it's almost inevitable," "Say war breaks out in the Middle East or anywhere else, Bernanke will just print even more money -- they have no option...they haven't got the money to finance a war,"
"You have to be in precious metals and equities... most wars and most social unrest haven't destroyed corporations - they usually survive,"
"If you can't live with volatility, stay in bed" Marc Faber told Reuters on the sidelines of an investment conference. - via ET Now

Marc Faber : Invest in remote Farmland

Marc Faber : The crucial question over the next decade is not “where will my returns be highest?” but “where will I lose the least money?” In fact, he believes that losses of 50% should be considered as a relative success , investment in remote farmland could pay off Marc Faber advises , as growing social tensions could make urban life intolerable. In his view the welfare state has evolved from the many helping the few to the few helping the many and that the inevitable crash, or “rebooting the computer,” will simply have to be endured. - in The CFA Institute Middle East Investment Conference via seeking Alpha

Marc Faber : Money printing leads to unintended consequences

Marc Faber : But Chris, what you say that it hasn’t been working. In my opinion it's not entirely correct. In the short term, it has been working to some extent in the sense that equity prices are up and interest rates are down. And, so companies can issue bonds at extremely low rates. But every money printing exercise in the world leads to unintended consequences at a later point. And, this is the important issue to remember. We don’t know yet for sure what the unintended consequences are. For sure, we know one unintended consequence and this is that the middle class and the lower classes of society, say fifty percent of the U.S. has rather been hurt by the increase in the quantity of money in the sense that commodity prices in particular food and energy have gone up very substantially. And, since below fifty percent of income recipients in the U.S. spend a lot, a much larger portion of their income on food and energy than to say the ten percent richest people in America and highest income earners, they have been hurt by monetary policy. In addition, say the lower income groups if they have savings traditionally they keep them in saay deposits and in cash because they don’t have much money to invest in the first place. So the increase in the value of the S&P hasn’t helped them but it helped the five or ten percent or one percent of the population that owns equities. So it's created a wider wealth inequality and wealth inequality and that is a negative from a society point of view. - in Chris Martenson interview
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Marc Faber : The unfunded liabilities increase rates substantially

Marc Faber : Yeah, plus the pension fund industry. They have to have some returns. When interest rates are at zero on cash deposits and on, say, long-term government funds on the ten year notes, say, two percent of thirty years, three percent, they cannot meet the liabilities so the unfunded liabilities increase rates substantially. - in Chris Martenson interview
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Marc Faber : The FED is printing Money left, right, and center

Marc Faber : Well, I mean I think personally that over the last twenty years the financial sector has not criticized the federal reserve sufficiently. They should have attacked the federal reserve for printing money left, right, and center. But, the financial service industry benefits from writing asset prices. So when you have a crisis whether it's the S&L crisis or the tequila crisis of ’94 or LPCM or the NASDAQ going down they cheered that the Fed continued to print money because it lifted asset prices. And, so their salaries went up and their performances went up and so forth and so on. So what I would do if I were the Fed chairman having been completely wrong about really everything, which is a truth series about the depression and the current conditions, for sure I would resign. But if I were, say, a pension fund I would tell the contributors and the recipients either you pay more or you receive less but we have to balance the books because the returns aren’t going to be the ones that we are used to between 1982 when the Dow Jones bottomed out below eight hundred and subsequently rose to over fourteen thousand. It's not going to happen again in real terms. Maybe if they print money but if they print money, as I said, the purchasing power of the, say, average American household would diminish because the cost of living will increase that much more. - in Chris Martenson interview
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Marc Faber Oil Prices Outlook

Marc Faber : I think you’re asking a very important question. Traditionally, oil prices around this level have been negative for economic growth around the world whereby we have to distinguish. Say, in 1998 when oil prices bottomed out at ten dollars a barrel the income from oil or the expenditures for oil were around four hundred million dollars. Sorry, four hundred billion dollars. Now, at the current price they are around four trillion dollars. In other words, some people get the four trillion dollars, the people that produce the oil, the Emirates, Saudi Arabia, Russian, Venezuela, Ecuador, Angola, Nigeria, and so forth. And, on the other hand, the people that use the oil, the U.S. and Western Europe, they pay a higher price. So for some people it's revenue and for some people it's an expenditure. The people that have to spend it unless they can borrow more and more as they have in the past, they can roll it over. In other words, it's not damaging. But, the people that can’t borrow money to pay for the increased price in the oil, in other words, like an increased tax, they suffer so they have less to spend. And, that’s why I think the economy in the Western world will be relatively sluggish. I think we’ve bottomed out in the U.S. but will remain relatively sluggish. But, to mind you say anything happens in the Middle East and the price of oil goes from, say, the current level of a hundred ten or a hundred dollars to a hundred fifty or two hundred dollars, what do you think Uncle Ben will do? Uncle Ben, he knows only one thing and this is to print money. - in Chris Martenson interview
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Marc Faber : The Financial system will be an MF Global where you dont get your money back from the Banks

Marc Faber : Well, I think that every person should own some precious metals as a reserve and as an insurance policy against a complete meltdown in the financial system. And, as you know, we had MF Global. What did the clients get, less than what they had in the company and I think eventually the financial system will be an MF Global where you don’t get your money back from the banks and the investment banks and from the mutual funds and so forth and so on. And, so I think everybody has to think to himself, how do I protect myself against such a black sworn event. Now you have a, say, a life insurance policy and you have a health insurance policy, if you have a health insurance policy and a life insurance policy, you’re not exactly hoping to die and have an accident. But if it happens you have it, and so I would suggest that people own some precious metals. And, I think, say, the price has gone up a lot since the lows in 1998, 1999, but compared to the expansion of credit in the world, compared to in the expansion of wealth in the world, and money printing, I don’t think that gold is terribly expensive. Having said that, I think we’ve reached a peak, but it went south of nine hundred twenty-one on September 6th of last year. We made the low at one thousand five hundred twenty-two on December 29th of 2011. We rallied again, I think we’re still in a correction period but I’m not going to sell my gold when I see people like Obama running America and possibly they’ll have a republican after 2013 but I don’t think the republicans will be much better. So I want to own some gold, and as I told you, I think the money printing will go on unless the Fed would come up and say we’re no longer going to print any money. The monetary base will remain steady, and even in that case I wouldn’t believe them.- in Chris Martenson interview
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Marc Faber : Hide your Gold in a safe deposit box outside the US

Marc Faber : This is a very good question. Where is anything safe? I mean I think in a safe deposit box it's relatively safe but maybe not in a safe deposit box in the U.S. because if you look at MF Global case it seems, and I don’t know for sure, but it seems that some people got their money but not others. This is a very disturbing thing to happen in the financial system. And, when I see this I think we have to be very prudent. So I would hold a safe deposit box outside the U.S. Now the question is how is it to hold a safe deposit in a bank if the bank closes down and this and that, you can also hold safe deposit boxes in duty free stores, warehouses, at airports around the world. In Switzerland we have them, in Singapore we have them, so that’s a possibility. - in Chris Martenson interview
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Marc Faber : The next Crisis will be much worse

Marc Faber : Well, I think that if you look at the history of crisis in the last, say, thirty years, each one was greater and larger. And, we had to mash that grain down so they printed money and so what did they produce, the housing bubble, and then even the worst crisis and the financial crisis. And, now they essentially give themselves the problems but they say alleviated the symptoms of the problems. And, I think the next crisis will be much worse. But, the question is, you know, as I said earlier, how do you protect yourself in the next crisis? Do you own equities, sovereign bonds, cash, commodities, gold, precious metals, and so forth. And, my view is that you’re probably better off in precious metals and in equities than in cash and in bonds. And I also happen to believe that in some parts of the U.S., notably the south, Phoenix, Atlanta, Las Vegas, where real estate prices are bottoming out. Now can they drop another ten percent? We are sure another drop of ten percent is not the end of the world when you consider that most individuals were in the NASDAQ in 2000 and then it dropped seventy percent. So I’m not saying that real estate will go up substantially, I’m just saying now you can buy real estate in the south of the U.S. at, say, thirty to forty percent discount to the construction costs. So I think it's reasonably priced. I don’t think it's – yeah, actually I think on global standards it's relatively cheap. But, my wider view is, you know, since 1982 we had the colossal asset inflation in equities, in real estate, and since 1998 also in commodities. One day this asset inflation will come to an end. The way the consumer price inflation in the 70s came to an end in, say, 1980 and thereafter we had this inflation. So it may be that the asset price inflation will not vanish altogether but we may be in a period of disinflation so if people are investing money maybe they should adjust to the reality that the returns in the future will not be ten or twenty percent per annum but may only, say, two percent or three percent above the rate of inflation. And, in terms of bonds and cash it will be, say, five percent below the level of inflation. - in Chris Martenson interview
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Marc Faber : We have a Credit addicted Economy

Marc Faber : Well, you could build a conspiracy theory. Basically the U.S. had a significant increase in the average household income in real terms from the late 1940s to essentially the mid-1960s. And, then inflation began to bite and real income growth slowed down. Then came the 1980s and in order not to disappoint the household income recipients you essentially printed money and had a huge debt expansion. So if you have an economic system and you suddenly grow your debt at a very high rate, it's like an injection of a stimulant of steroids. So the economy grew at the relatively fast pace but built on additional debt. And, this obviously cannot go on forever. It went on for much longer than I thought because I started to write about excessive debt growth already in the late 80s, I was very early about this. But when it comes to an end you have a problem. So the Fed had never paid any attention, the Fed is about the worse economic forecast you can imagine. They are academics. They never go to a local pub. They never go shopping or they lie but basically they are a bunch of people who never worked a single day in their lives. They’re not businessmen. They have to balance the books, earn some money by selling goods, and pay the expenditure, they get paid by the government. And, so these people have no clue about the economy. And, so what happens is they never paid any attention to excessive credit growth and let me remind you, between 2000 and 2007, credit growth was five times the growth of the economy in nominal terms. In other words, in order to create one dollar of GDP, you had to borrow another five dollars from the credit market. Now this came to an end in 2008. Now the Fed have never paid any attention to credit growth, they realized if we have a credit addicted economy and credit growth slows down we have to print money. So that’s what they did. But believe me it doesn’t take a rocket scientist to see that if you print money you don’t create prosperity. Otherwise, every country would be unbelievably rich because every country would print money and be happy thereafter. - in Chris Martenson interview
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